Class Warfare May Be In Full Swing in the US

By Ren LaForme, Political Columnist – March 9, 2011

On Academy Awards night 2011, sometime between a Best Supporting Actress’s prolonged speech and a pregnant Best Actress’s sincere tears, an unassuming man with thinning hair took the stage. As Oprah Winfrey handed him an Oscar for Best Documentary Feature, the man uttered the most overtly political statement of the night.

“Forgive me,” said Charles Ferguson, a filmmaker and software entrepreneur who received a Ph.D. in political science from M.I.T. “I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that’s wrong.” [1]

His film, “Inside Job”, is a thorough examination of the U.S. financial industry and its large-scale collapse in 2007. Of the various points that Ferguson raises in the film, perhaps the most noteworthy is that the U.S. government has not only failed to punish the executives who caused the financial crisis, but has appointed them to important government posts. Ferguson argues that these corporate interests are using their power in the United States government to bolster their best interests at the expense of the American people.

The chairman of the U.S. Commodity Futures Trading Commission, Gary Gensler, was a partner at Goldman Sachs before President Barack Obama appointed him to his current position. [2] People such as Sen. Bernie Sanders have accused him of being directly responsible for insurance giant AIG’s massive collapse. Sanders said that Gensler used his influence to exempt credit default swaps – which lie at the heart of the economic meltdown – from regulation, allowing Goldman Sachs to massively increase profits while increasing investor risks. [3]

In response to the collapse, the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed. [4] The act represents the largest change in financial regulation in the United States since the Great Depression. [5] Still, in his film, Ferguson criticizes the bill for being “weak,” arguing that it fails to address many aspects of the collapse. As some early March, some of the reforms were not even being enforced. [6]

Both Sen. Chris Dodd and Congressman Barney Frank, the sponsors of the bill, have ties to the financial industry – Dodd with Countrywide financial (now owned by Bank of America), and Frank with Fannie Mae and Freddie Mac. [7]

But it would be hard for any U.S. politician not to have some ties to the financial industry. With over 3,000 lobbyists – five for every member of Congress – and $1.3 billion spent just in an effort to influence the Dodd-Frank Act, the financial world has pushed its so-called invisible hand deep into the government’s pocket. viii At this point, to say that Congress is beholden to corporate interests would be a leap, but not a very far one.

One could say the same about Wisconsin Gov. Scott Walker. Last month, Walker, a Republican, received a phone call from a gonzo journalist from the Buffalo Beast named Ian Murphy. During the call, Murphy pretended to be David Koch, a billionaire businessman who has been tied to the tea party movement. [9] Murphy made crude comments about liberals and women, which Walker generally played down, but Murphy-as-Koch did get him to say some revealing things about the protests over labor unions that were happening in Wisconsin. The call ultimately made it seem as though Walker answered to Koch.

At one point, Murphy-as-Koch offered to fly Walker out to California to “show [him] a good time” after he had stomped out the protests.

“All right,” Walker said. “That would be outstanding.”

This prompted further inspections from the Fourth Estate, which found that David and his brother Charles Koch gave Walker approximately $100,000 in campaign contributions during the 2010 election cycle. [10] Another $3.4 million spent on television ads and mail attacks may have also been Koch-influenced.

But Walker did not just take the Koch brothers’ money. He also took their position.

On Feb. 11, Walker proposed a piece of legislation that would strip public employee unions of their bargaining rights. [11] This move would severely weaken unions in the state of Wisconsin, taking away much of the leverage that average workers can use against management. The legislation was straight from the Koch brothers’ bag of tricks. They have long backed groups such as Americans for Prosperity, the Cato Institute, the Competitive Enterprise Institute and the Reason Foundation, all of which take a hostile stance toward unions.

Limited oversight of the financial industry and union-busting governors are, of course, bad for the blue-collar family. Pointing that out, however, constitutes “class warfare” according to Republicans. [12] Democrats have used Walker’s legislation to point out that Republicans seem to serve the rich while simultaneously taking from the poor, bringing shouts of “class warfare” from Fox News and its ilk. [13] But Democrats might be right.

All across the United States, Republicans are cutting funding that benefits the middle class and poor while the wealthy receive tax cuts. In Florida, Gov. Rick Scott proposed $1.6 billion in cuts to education. [14] The money saved would be spent through cuts to corporate taxes and property taxes.

In the House of Representatives, Republicans have threatened to shut down government if their budget does not pass. The Republican budget includes cuts such as $2 billion from job training programs, $2 million from the Minority Business Development Agency, $75 million from the Legal Services Corporation, $758 million from WIC, and $6 million each from the National Endowment of the Arts and National Endowment of the Humanities. [15] Most of these programs directly benefit the poor and middle class. And in Wisconsin, of course, Gov. Walker is slashing unions while signing tax cuts for corporations into law. [16] Perhaps it is the Republicans who are engaging in class warfare.

In any case, the United States now ranks at the top of the list of developed nations when it comes to income inequality. [17] It is the only developed nation where income inequality has actually risen since 1980. The consequences of this statistic may be dire for America’s middle class and poor, especially when faced with further cuts.

Halfway through “Inside Job,” a gray-haired man named Dominique Strauss-Kahn, chairman of the International Monetary Fund, delivered a poignant quote that managed to summarize the entire movie, as well as the state of the U.S.

“At the end of the day, the poorest, as always, pay the most,” he said.

Recommended Reading

Sources
1) http://www.marketwatch.com/story/inside-job-director-slams-wall-street-2011-02-28?reflink=MW_news_stmphttp://www.bloomberg.com/apps/news?pid=newsarchive&sid=aRfnvBif88Z4

3) http://www.harpers.org/archive/2009/03/hbc-90004606

4) http://www.gpo.gov/fdsys/pkg/PLAW-111publ203/content-detail.html

5) http://online.wsj.com/article/SB10001424052748704682604575369030061839958.html

6) http://www.nytimes.com/2011/03/06/business/06gret.html

7) http://www.judicialwatch.org/news/2009/dec/judicial-watch-announces-list-washington-s-ten-most-wanted-corrupt-politicians-2009

8 ) http://www.commondreams.org/newswire/2010/05/21-8

9) http://www.huffingtonpost.com/2011/02/23/scott-walker-buffalo-beast-phone-prank_n_827058.html

10) http://current.com/news/93010198_billionaire-tea-party-tycoons-financed-wisconsin-s-anti-union-governor-records-show.htm

11) http://www.jsonline.com/news/statepolitics/115501969.html

12) http://www.examiner.com/political-buzz-in-cincinnati/democrats-use-class-warfare-to-raise-money-during-budget-crisis

13) http://video.foxnews.com/v/4484093/new-class-warfare-emerging-in-america/

14) http://www.americablog.com/2011/03/fl-gov-rick-scott-16-billion-in.html

15) http://appropriations.house.gov/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=259

16) http://www.postcrescent.com/article/20110201/APC0101/102010421/Wisconsin-Governor-Scott-Walker-signs-tax-cut-bill-into-law

17) http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States

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